I propose to move an amendment to the bill to provide overriding legal authority to the institutions to vary the rate of interest, if they so desire, in order to pass on the burden of interest tax to the borrowers. Further, I also propose to exempt from the imposition of interest tax cooperative land mortgage banks, cooperative land development banks and cooperative societies engaged in the busines of banking which cater primarily to the needs of farmers and village artisans. My proposal to extend the coverage of the expenditure tax to the expenditure incurred in restaurants providing superior facilities like air conditioning has been generally welcomed because these restaurants are patronised by the affluent sections of the society. It has, however, been pointed out that the criteria for identification of restaurants, expenditure in which would come within the purview of the proposed tax, is cumbersome in the form in which it is contained in the bill. I, therefore, propose to modify it and adopt a single criterion, which will be that the restaurant is air-conditioned. I will be moving necessary amendment to the bill for this purpose. I propose to make some modifications to the proposals in the bill relating to deducation of tax at source from certain payments. The requirement to deduct tax from interest on bank deposits will apply only to interest on term deposits other than recurring deposits. Further, cooperative land mortgage banks, cooperative land development banks, primary agricultural credit societies and primary credit societies will be taken out of the purview of this requirement. We would thus exclude from the ambit of tax deducation at source most of the depositors from rural areas. Further, I am sure that these modifications will ensure that the small tax payers are not put to any harassment as a result of the proposed requirement of deducation of tax at source from bank interest and with drawals from the national savings scheme. Tax at source by furnishing a declaration in writing in duplicate in the prescribed from.
